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Groups Concerned, Hopeful About Const. Jobs

Courtesy of U.S. Bureau of Labor Statistics

By Roland Murphy for Arizona Builder’s Exchange

Construction added 11,000 new jobs in May, according to the U.S. Bureau of Labor Statistics.

While that puts the overall number at 6,881,000 – its highest point since late 2008 – leading industry groups remain concerned about the state of the labor market, particularly when it comes to overall participation and the availability of skilled workers.

In an analysis by the Associated General Contractors of America, Ken Simonson, the association’s chief economist, noted average weekly hours in the industry rose to 39.9. The average weekly hours are the highest May figure since ABC’s series began in 2006. “Construction firms continued adding new jobs at a faster rate than the broader economy during the past year as demand for their services remains strong,” he said. “Even so, they had to keep employees on the job for more hours because they could not find enough qualified people to hire.”

The shortage of construction industry employment opportunities during and immediately after the Recession, combined with an ongoing under-investment in vocational training, officials said, mean labor shortages are becoming more severe.

“It is time for elected officials to get the word out to students that construction offers high-paying jobs with upward mobility,” said Stephen E. Sandherr, the AGC’s chief executive officer. “The best way to deliver that message is to provide the funding and flexibility to set up programs that expose more students to the opportunities that exist in construction careers.”

Associated Builders and Contractors’ View

In its own analysis last week, Associated Builders and Contractors raised similar concerns. While construction employment’s 2.9 percent yearly basis expansion significantly outperformed all other nonfarm industries, ABC Chief Economist Anirban Basu called the statistics on labor force participation and the construction unemployment rate, “worrisome.”

In his report, Basu said, “The labor force participation fell to 62.7 percent in May, a multi-month low. There is also evidence that the construction labor market continues to tighten, which implies construction firms will continue to struggle to find workers, particularly at higher skill levels. This means that construction spending growth is decelerating even as labor becomes more expensive. None of this is good from the perspective of profit-margins or aggregate industry profitability.”

He also added that much of the industry’s job gain was in the highly volatile heavy and civil engineering segment. According to Basu, “Nonresidential specialty trade contractors collectively shed employment, which is consistent with the weak construction spending numbers released yesterday. Those statistics indicated ongoing softening in construction spending in both private and public segments.”

On an encouraging note, he pointed out the financial markets continue to perform well, meaning investor optimism remains high and that he expects more robust growth over the next two quarters. “With the construction unemployment rate remaining so low one further hopes that more job seekers will be induced to seek employment in the construction trades. Unfortunately, to date that has not happened at sufficient levels.”

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